HBH.DE
Hornbach Holding AG & Co KGaA
Price:  
106 
EUR
Volume:  
17,949
Germany | Specialty Retail

HBH.DE WACC - Weighted Average Cost of Capital

The WACC of Hornbach Holding AG & Co KGaA (HBH.DE) is 5.4%.

The Cost of Equity of Hornbach Holding AG & Co KGaA (HBH.DE) is 7.55%.
The Cost of Debt of Hornbach Holding AG & Co KGaA (HBH.DE) is 4.25%.

RangeSelected
Cost of equity5.9% - 9.2%7.55%
Tax rate23.8% - 25.2%24.5%
Cost of debt4.0% - 4.5%4.25%
WACC4.5% - 6.3%5.4%
WACC

HBH.DE WACC calculation

CategoryLowHigh
Long-term bond rate2.8%3.3%
Equity market risk premium5.1%6.1%
Adjusted beta0.620.9
Additional risk adjustments0.0%0.5%
Cost of equity5.9%9.2%
Tax rate23.8%25.2%
Debt/Equity ratio
1.041.04
Cost of debt4.0%4.5%
After-tax WACC4.5%6.3%
Selected WACC5.4%

HBH.DE's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for HBH.DE:

cost_of_equity (7.55%) = risk_free_rate (3.05%) + equity_risk_premium (5.60%) * adjusted_beta (0.62) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.